The New Wal-Mart Effect: Cleaner Thai Shrimp Farms
Rubicon Resources LLC, a Los Angeles-based supplier of farmed shrimp to Wal-Mart, has bought and upgraded roughly 150 Thai shrimp farms. (24 July 2007) Wall Street Journal
Note from Editor: The article below is quite
faulty in its analysis, so please read my response below which I sent to the
editor of the Wall Street Journal, hoping they will print my response. It is
these kinds of misinformation articles that need our attention today!
24 July 2007
by Kris Hudson and Wilawan Watcharasakwet
Amid the fishing villages of Chanthaburi Province, bracketed by the Gulf of Thailand and the Khao Soi Dao mountains, the inherently messy trade of shrimp farming is undergoing an environmental overhaul spearheaded by Wal-Mart Stores Inc.
The destruction of mangrove swamps and the pollution of natural waterways with waste from shrimp ponds has long drawn the ire of environmentalists, but in the past two years, Rubicon Resources LLC, a Los Angeles-based supplier of farmed shrimp to Wal-Mart, has bought and upgraded roughly 150 Thai shrimp farms. Among Rubicon's changes: increasing the testing and documentation of what is in its ponds, planting mangrove elsewhere to make up for the trees destroyed by its farms and standardizing treatment of the water discharged from its ponds.
Rubicon is pushing to meet a year-end deadline that all phases of shrimp production adhere to environmental and social standards backed by Wal-Mart, Red Lobster operator Darden Restaurants Inc. and other big buyers. The U.S.-based industry group that drafted the standards, the Global Aquaculture Alliance, plans to unveil similar guidelines this year for farming of tilapia and catfish, with standards for salmon following later. Wal-Mart pledges to endorse those, too, and to require compliance from its suppliers.
But the new standards come with controversy. An estimated 80% of Thai shrimp farms -- most of them small operations run by families living on-site -- either lack the resources to make necessary upgrades or balk at the certification fees as costs they likely won't recover. That could widen the gap between the haves and have-nots in Thai shrimp farming and world aquaculture as a whole, providing a greater advantage to large, well-capitalized suppliers like Rubicon.
Shrimp is the largest seafood crop imported to the U.S., totaling 590,299 metric tons last year. And Thailand, home to one of Asia's most advanced aquaculture industries, is the largest exporter of shrimp to the U.S. -- $1.28 billion worth annually. Aquaculture -- the practice of raising fish, crustaceans or mollusks in captivity for human consumption -- is gaining importance as wild fish populations dwindle. If current consumption rates continue, a 2006 scientific study predicted, all wild aquatic species currently harvested for food will fall below a tenth of their largest historic population by 2050.
Roughly half of the seafood consumed globally is already farm-raised, and as that expands, Wal-Mart and others are seeking to reduce the environmental problems it often leaves in its wake.
The changes afoot in the Thai shrimp ponds reflect the world-spanning, industry-rattling reach of Wal-Mart's push for environmental sustainability. The Bentonville, Ark., retailer has prodded its suppliers to cut their packaging and pare their reliance on nonrenewable fuels. It has relentlessly promoted long-lasting but slow-selling compact-fluorescent light bulbs. It is the world's largest buyer of organic cotton, purchasing more than 10 million pounds a year. And it has pledged to eventually buy its wild-caught fish only from fisheries certified as environmentally sustainable.
Wal-Mart first threw its weight behind the aquaculture alliance's shrimp-farming standards in 2005, announcing that by the end of this year it would buy all its shrimp from farms certified as meeting the standards.
The endorsement drew attention; Wal-Mart buys more shrimp than any other U.S. company, importing 20,000 tons annually -- about 3.4% of U.S. shrimp imports. With Wal-Mart's nod, "we went from trying to convince individual facilities to become certified to having long waiting lines," says George Chamberlain, president of the aquaculture alliance.
Complying with the mandate isn't easy. Achieving certification takes three to six months on average, and rarely does a farm pass without needing to shore up aspects of its operations. Farming shrimp produces substantial pollution, from the waste generated by the crustaceans themselves to a range of water-borne contaminants. In extreme cases, farmers let their ponds flow untreated into the nearest river, souring the environment for native wildlife. Under the new standards, contaminants must be removed from the farms' discharge with filters, settling ponds and by infusing oxygen, usually with mechanized paddle wheels that churn the pond water. The quality of that discharge must be meticulously monitored.
Other requirements: Farmers must replace any mangroves cleared for their ponds by planting three times as many of the trees elsewhere. Applying antibiotics to the shrimp is prohibited because the drugs can seep out of the ponds and weaken the immune systems of wild species. The farms must pay workers the prevailing local wage.
Many small farmers in Thailand have disregarded the aquaculture alliance's standards, which, like the antibiotics ban, they say duplicate those already established by the Thai Department of Fisheries' Code of Conduct for aquaculture farms as well as standards imposed by European buyers. And some Thai farmers see little benefit in paying inspection fees -- amounting to a fraction of a penny per pound of shrimp produced -- or upgrading facilities where necessary because Wal-Mart won't reimburse them for their costs nor pay a premium for certified shrimp. Wal-Mart views those costs as the industry's responsibility.
"It duplicates the procedure, and it doubles the expense," says Pinyo Kiatpinyo, president of Thailand's Network of Shrimp Farmer Cooperatives, which comprises 2,000 small farmers nationwide.
Others see the standards fueling a continuing consolidation of the industry. Wal-Mart prefers to buy from fewer, stronger suppliers with control over all phases of production. Rubicon, for example, owns 14 seafood-processing plants, roughly 150 farms and importing and exporting operations. "Short term, [the costs of meeting the standards] are onerous," says Brian Wynn, Rubicon's president and chief executive. "Long term, they are beneficial because they set up barriers to entry to nonintegrated companies."
In the past two years, Rubicon spent more than $2 million amassing its portfolio of Thai farms and improving their operations to meet certification standards. "We have buffer canals, water-treatment processes, mangrove conservation, and [we] take care of public canals around our farms," says Chana Tanglertpanya, president of Rubicon's aquaculture division in Thailand. "We also make good relations with the local villagers."
Wal-Mart says it doesn't foresee needing to shift some of its shrimp buying out of Thailand because of farms failing to meet the standards, but it can if it must. "Proactive suppliers and farmers will see this opportunity and respond" by complying with the standards, said Peter Redmond, Wal-Mart's vice president of seafood and deli. "The rest of the [Thai production] will sell on the open marketplace, the same way it always has."
Meanwhile, some environmental groups criticize the aquaculture alliance's standards as too weak, alleging they stop short of significant environmental safeguards to instead allow producers a lower hurdle for gaining compliance. The World Wildlife Fund is overseeing the drafting of environmental standards for aquaculture production of 11 species in the hope that Wal-Mart will either adopt them or prod the aquaculture alliance to match them.
--James Hookway contributed to this article.
Source: Wall Street Journal
(subscription may be necessary)
Response to Wall Street Journal:Dear Editor,
I am responding with much concern to your article, "The New Wal-Mart Effect: Cleaner Thai Shrimp Farms." This is clearly an exaggeration based upon unfounded shrimp farm industry propaganda. In the Developing nations where shrimp production is most prominent and where these certification standards will apply, one discerns gaps between reality and these flawed standards developed without input from those most affected by shrimp aquaculture expansion - the countless subsistence farming and fishing communities which lie in the path of industrial shrimp aquaculture, and whose members' lives and livelihoods are repeatedly disrupted by this same industry that now makes claims to certify itself via self-set "standards."
Now Wal-Mart, the world's largest
retailer, intends to "begin certifying all of their imported farm-raised
shrimp," but this wishful thinking will not ensure it "is grown in a sustainable
way, with minimal impacts on the environment." For one thing, the certifying
organization chosen for third-party review is the Aquaculture Certification
Council (ACC), which is utilizing a description of Best Aquaculture Practices
(BAP) developed by the Global Aquaculture Alliance (GAA), itself a powerful
shrimp industry consortium which set up the ACC in the first place to do its own
bidding in certifying its shrimp production. This is a convoluted certification
process, to say the least, and should not be looked at through rose tinted
lenses as the article does.
These standards will not be effective in halting mangrove loss due to shrimp farming. Shrimp aquaculture is still considered by many scientific experts to be the largest contributing factor to present day loss of mangrove ecosystems.
From Alfredo Quarto